Industry's Awareness Regarding Market Condition PDF

CHAPTER 1 **INDUSTRY'S AWARENESS REGARDING MARKET CONDITION THAT HAD ALREADY PENETRATED THE WHOLE BUSINESS SYSTEM LIKE:** - The robustness of the market; - Complex customer's demand for superior products and excellent customer service as they had turned out to be smarter, knowledgeable...

CHAPTER 1 **INDUSTRY'S AWARENESS REGARDING MARKET CONDITION THAT HAD ALREADY PENETRATED THE WHOLE BUSINESS SYSTEM LIKE:** - The robustness of the market; - Complex customer's demand for superior products and excellent customer service as they had turned out to be smarter, knowledgeable and more perceptive in the judgements they themselves create and the environment that surrounds them; - Intensified presence of much fiercer competitors; - Technology advancements; - Social upheavals; - Government issues and concerns -Every business, coexists with the ultimate goal of pleasing the customer. -Marketing managers occupy a critical role in the firms decision making. **SCANNING THE ORGANIZATION'S EXTERNAL FORCES:** **-"Never enter unfamiliar terrain"by Socorro Ramos**, a tycoon, business savy and owner of the largest retailing business in the Philippines. -Scanning the environment also referred to as environmental monitoring. It is the gathering of information pertaining to the company's external environment; processing the gathered information into strategic analysis. 6 UNCONTROLLABLE EXTERNAL FORCES 1. Demographics-pertains to the characteristics of the population, which explain who they are how much they are willing to sacrifice as payments to products. 2. Technology 3. Social and cultural forces- orientation and beliefs may influence the persons thoughts and feelings 4. Economic condition- business cycle goes through 4 stages: - Prosperity period-manifest growth and success - Recession- is a period where both consumers and businesses are tightening their economic belts. - Depression- is a period of sustained recession. Companies experience scarcity may result to shutting down of operation. - Recovery- is an upswing period where companies are slowly recuperating from the ill-fated period of recessions or depressions.Most challenging part of managing marketing activities. 5. Political and legal forces 6. Competiton - Brand competiton- - Substitute products- item that can replenish the needs or wants - Competition for target customers- marketers have to work double SCANNING THE ORGANIZATION'S INTERNAL FORCES: -These are set of elements inside the organization that define the extent and limitation of their marketing effort. 4 INTERNAL FORCES: 1. Target market 2. Marketing objectives- objectives serves as the organizations control mechanism since it directs plans. 3. Marketing organizations- refers to the filling of positions in the organizations structure through the identification of the right people to do the right job. 4. Marketing mix- includes marketing levers such as product strategy, pricing strategy, promotion and distribution strategy. APPROACHES IN SCANNING THE EXTERNAL AND INTERNAL ENVIRONMENT 4 DIFFERENT APPROACHES: - Undirected viewing- the individual is exposed to information with no specific informational need in mind.  - Conditioned viewing- when an individual has already created a goal - Informal search- scanning the firms environment in an unstructured effort just for the purpose of expounding ideas. - Formal search- deliberate, planned and intentional approach, supported by methodology, plans and budget. IMPERATIVES IN SCANNING THE ENVIRONMENT: -No business endeavors will thrive without management support - Clear-cut goal or objectives- driving force in every business undertaking. It sets direction given the required length of time. - Sources of accurate information- sources of data must be reliable. Primary data may come from the target respondents such as client or employees. Secondary data are taken from journals, reports and literature. - Training and education- - Budget- enough budget for this specific undertaking to ensure good result. CHAPTER 2 -Organization's survival depends on the customer. 3 FACTORS AFFECTING THE PURCHASING DDECISION OF A CONSUMER: 1. Psychological variables- these are manifested in an individual's motive. Psychological variables have different dimensions: - Motivation- starting point what, how and why consumers buy or not buy. 15 fundamental human motives are curiosity, food, honor etc. - Perception- they search for possible information that could unburden them - Learning - Attitude- persons general feeling or opinion about something. - Personality- refers to any distinguish characteristics of a person influenced by different situations. - Lifestyle- individuals mode of living affect the spending habit. 2. Social influences- "Man is by nature a social animal. He has to enter into relationship with his fellowmen to live a meaningful life", stated by Aristotle. - Culture- comprises the totality of an individual or a group of individuals belief, values, language and attitude. Culture also includes symbols and even artifacts that could depict the prolificacy. - Social class- refers to the ranking of members of a society. - Reference group- strength of the stimulus coming from the formal or informal group formed within a society. - Family- structured by a group of individual living together in a household. 3. Actual buying milieu- consider the store's atmospheric attributes. - Physical environment - Social environment -Hedonistic consumer (where consumer is seen to have a great love for one self, for pleasure) -doctrine of caveat-venditor (this speaks about consumer sovereignty where buyers determine which goods and services remain in production; hence they have the power to rule out products which they consider unwanting). THE USE TOTAL QUALITY CONCEPT IN UNDERSTANDING THE CUSTOMER: -Quality gurus believed that total quality approach should be grounded on the principles of continual improvement on the 3 important elements such as the ff: - 1^ST^ element the measure- imply that quality can be measured - 2^nd^ element the people- serves as a reminder to organization to prioritize people empowerment in the workplace - 3^rd^ element the processes- means that every organization embodies a defined system or program of works that should be enhanced or improved continually. CONSUMER DECISION PROCESS -Consumers become quite unpredictable at times. 1. Need recognition- 2. Information search- once needs were identified and recognized, a strong motivation will begin to set into the consumers mind. 3. Evaluation of alternative 4. Decision 5. Post-purchase behaviour -No business owners can easily afford to endure the risks of losing a big sum of money for a haphazard undertaking. PROCESS INVOLVED IN CONDUCTING RESEARCH: - Situation analysis - Gathering primary data - Analysis and interpretation of data - Solution and recommendation CHAPTER 3 -Marketing segmentation can be defined as the process of identifying and dividing target market into smaller groups who share similar characteristics. 6 ADVANTAGES OF SEGMENTATION: - It allows the company to maintain a solid view of how marketing plans and activities will be carried out for the purpose of winning the preference of the target market. - Segmentation generates a customer-centric marketing program that allows organizations to increase the rate of their competitiveness. - Segmentation offers possibility of market expansion on the basis of geography. - As segmentation provides refinement of product messaging and deployment of the company's optimal offer to target market, customer retention becomes the end view. - Clear product messaging is only possible if the company knows their targets. - Increase in competitiveness VARIABLES OF MARKET SEGMENTATION 4 SEGMENTATION APPROACHES: - Demographic segmentation- common approach wherein markets are divided into units on the basis of different variables such as age, sex etc. - Geographic segmentation- buying preferences are sometimes defined by the geographic locations. - Psychographic segmentation- personality traits and characteristics including persons interests, hobbies and lifestyles are the aspects that marketer consider when dividing markets using this. - Behavioural segmentation- this approach is shaped by the persons buying behaviour on the basis of his or her buying patterns. REQUIREMENTS OF AN EFFECTIVE SEGMENTATION: - Measurable - Accessible - Substantial - Actionable -The segmentation, targeting and positioning is the second most popular marketing model beaten by the SWOT/TOW'S matrix. SEGMENTATION, TARGETING AND POSITIONING: A MODERN MAKRETING MODEL 1. Market segmenting- this provides clear insights about the prospective market. 2. Targeting- once market segmentation has been completed, the company should now select one or few market segments. 3. Product positioning CHAPTER 4 -Marketing plan is a detailed, systematically-arranged proposal consisting of market-related activities that depict firm's intention to gain better directions in their decisions and quick guide on how to outsmart competitors. -Marketing plan brings together the elements of marketing- product, price, promotion, and placement. THE 4FS OF MARKETING PLAN -A marketing guru's firm conviction goes something like, "even if you have the best product in the world, if you will not promote it, then it is just among the ordinary, futile product" - Factual- ideas or statements to be included in the proposal should be based on reliable facts. - Focused- marketing plan is prepared annually and reviewed on a monthly basis. - Financially-set- management support is among the keys in achieving organizational goals - Flexible PREPARING MARKETING PLAN -Marketing executive is responsible for preparing the marketing plan. -Marketing plan provides a strong support in the realization of the organizations strategic goals. IMPORTANT STEPS IN THE PREPARATION OF THE MARKETING PLAN: - Brief summary - Describe the target market - Fact-findings- through this step may require relative costs and definitely time consuming, yet must be based of facts. - Setting of verifiable marketing objectives- "SMART" has already become the buzz word in the industry in crafting objectives. - Plan of actions- it is important to note that activities should be designed in harmony to the objectives. a. Concentration b. Multiplier effect c. Comparison of alternatives - Numbering the plans a. Flexibility b. Focus on controllable costs c. Ensure that the activity is a non-punitive one - Monitoring and control - Organizational design - Incentives are deemed necessary - Rapid and accurate movement of information vertically and horizontally - Careful examination of the internal marketing strategies. CHAPTER 5 CLASSIFICATION OF GOODS: 1. Consumer goods- known as final goods are commodities subsequently bought for final or personal use. a. Convenience goods- food items, newspaper, medicines which are frequently purchased b. Shopping goods- pair of sneakers or appliance, it undergo evaluation such as comparing the goods quality, cost. c. Specialty goods- refers to consumer goods that may posses exceptional or unique characteristics that consumers who would like to acquire them shall need to exert extra effort. 2. Industrial goods- are goods purchased for business use under different circumstances with the primary purpose of reselling the output to target industrial buyers. -Product mix is a group of everything a company sells. It consists of a wide range or a mixture of product lines. -Product line is subset of the company's product mix. THE PRODUCT LIFE CYCLE -Products are biological organisms, they grow and mature. -Introduction phase of the cycle, a new product may capture the interests of an overly interrupted market. -Maturity stage is the challenging phase of the product life cycle, as the product matures and gains favourable consumer acceptance and market share it becomes an attractive brand. -The product life cycle concept is no doubt very useful to the sustainability of the product and the management in general. MARKET-DRIVEN PRODUCT PLANNING AND DEVELOPMENT PROCESS 1. Product planning and development poses numerous benefits to a firm. First, it is a competitive weapon in boosting the company\'s growth rate because of its attempts to introduce additional products in the company\'s current product lines or modify an existing brand regarding its quality, size, design, color, packaging, shape, price, etc. 2. Second, it serves as a starting point of marketing planning. Product planning is a prelude in the successful preparation of the entire marketing program of the firm?. 3. Third, it is indeed a strong indicator of the company managers\' managerial prowess. 4. Fourth, Product planning is an important way to fulfil the social responsibilities of the business. CATEGORIES OF NEW PRODUCT STRATEGY - New-to-the-world products- products that came from recent inventions. - New-to-the-firm products- products are no longer new to the world but are anticipated to bring the company into new category - Additions to existing product lines- when a well-known brand brings out a variation of its product in terms of its size, color. - Improvements and revisions of existing products - Repositioning - Cost reductions- products that have replaced PRODUCT PLANNING AND DEVELOPMENT MUST BE DONE FOLLOWINGTHE STEPS: 1. Customer need analysis 2. Idea generation 3. Screening ideas-stage where has to eliminate ideas,in the screening phase prior to reaching a decision, the planning and development team may consider evaluating certain risks that may be associated with picking the not-potential new product idea: a. Strategic risk-pertains to picking a new product idea b. Market risk- attached to new product wherein the value-added or any differentiation attributes c. Internal risk-pertains to the possible limitations of the org. to transform the new product idea into a fully-commercialized item 4. Evaluation of prototype- a prototype takes the form of the original piece which will undergo testing 5. Business analysis- new product idea that has survived the screening phase needs to undergo a through business analysis. This phase covers the determination of the costs involved in developing the new product and forecast the profits. 6. Product development-engineering stage o the NPD wherein after the product has meet all the expectations of both the designer 7. Market tests 8. Commercialization-final stage of NPD wherein the company boldly reveals the brand or item. WHY NEW PRODUCTS FAILS: 1. The product offers no point-of-difference at all 2. Limited retailer support 3. Poor product design 4. Weak or poorly executed new product launch 5. Aggressive competitors actions 6. Small target market BRANDING AND BRAND EQUITY -Brand is a product service or concept that is publicly distinguished from amongst in the industry. -developing a branding strategy is a crucial decision for top management. It serves as the blueprint for marketing tactics. -decisions for branding strategy may start from **two general options, either decide to use manufacturers brand name or private brand**. -brand extension strategy occurs when a company decides to stretch the use of their current brand name to label any newly introduced and related products in their products mix. -Another approach is family branding, also known as umbrella branding, which is common for organizations that attach their corporate name to a product introduced as either a new market segment or a different product class. -Individual branding or multi-branding strategy. This strategy holds rational benefits such as allowing each brand to succeed or fail on its own merits without sacrificing the company's other products. -brand equity can be viewed as the set of assets or even liabilities linked to the brand that adds value to the product itself. FEATURES OF GOOD PACKAGING: 1. Unique and handsome design that has the influence of pulling customers towards buying the product; it is advised that constant redesigning of packaging be observed to make the product more appealing and relevant despite changes in the business environment; 2. Provides convenience to users, not too heavy nor too big for its size; easy opening is another consideration; 3. Security of the products from dust, light, spoilage, damage, evaporation, etc.; 4. Adaptability to be stored or kept in various places such as cabinets, shelves etc.; 5. Dependability of the packaging as it is associated to the customers impression about the company; and 6. Status or prestige as reflected in the customers\' sense of confidence in every purchasing act. PRICING AND ITS OBECTIVES -How to price the companies products or services correctly is among the most crucial and complex decision confronting every firm. Price is the only revenue generating element amongst the Ps in the marketing mix. PRICING ALSO SUPPORTS THE ATTAINMENT OF SOME SPECIFIC OBJECTIVES SUCH AS: 1\. Achieve the financial goals of the company specifically their target return on investment in order to support all plans of the organization; 2\. Match the expectations or requirements of the target market in a specific product line; 3\. Achieve the desired market share; 4\. Stabilize the growth rate of the product; 5\. Help recover the high costs of research and development incurred during the development stage of the product; and 6\. Induce more purchasing activities CONSIDERATIONS IN PRICING YOUR PRODUCT EFFECTIVELY: 1. Cost-plus pricing- related to mark-up pricing in which the costs of producing a product or completing a project are accounted after which a profit amount referred to as mark-up is added prior to getting the selling price of the product. 2. Price skimming strategy-commonly used in setting prices for newly introduced products 3. Penetration pricing strategy -- applicable to newly introduced product, prices are set lower than those of the competitors. 4. Psychological pricing strategy- sometimes called a charm pricing. Researchers proved that odd-priced products create an impression than even numbers. 5. Price bundling strategy- common retailers practice of putting together a set of products at a price lower than what is conceived to be higher when bought separately. 6. Follow-the-leader pricing strategy- method of pricing several related products that are sold separately but within a certain range of prices. INFLUENCES IN PRICING DECISIONS -It can be divided into two broad categories: internal and external factors. 1. Internal factors- these are factors in which the management has control over-phenomena a. Company objectives- this factor has a powerful influence in the company's product pricing decisions. b. Company structure c. Marketing mix- this is a business tool designed by the management for smooth execution of their marketing program. 2. External factors- these are elements in a business environment in which the organization has no control over. a. Demand b. Competition c. Political and legal WHY PRODUCT STRATEGY IS MARKET-DRIVEN? -All great products start with a clear strategy that is customer or market-driven. -Delighting customers is now the mantra of modern businesses nowadays and one of the important characteristics of market-driven business model. POPULAR CAMPAIGNS - Personalized offers that are sent occasionally through direct or electronic mails - Exclusive events - Random acts of kindness. The best campaign for brand customers.